Issues identified

Historical Issues:
1997- When Maruti came under Government control then the initial tussle between the Indian Government
and Suzuki started and it was because senior decision makers have been gradually changed with a bias
towards Japanese executives.

2000 - A major Industrial Relation issue began and employees of Maruti Udyog went on an
indefinite strike, demanding major revisions of their wages, incentives and pensions. Employees
resorted to slowdown in Oct 2000, to force a revision to their pay and perks.

2003 - The central government prevailed and privatised Maruti Udyog in 2003. Suzuki of Japan
became the majority owner of Maruti Udyog Limited with 51% share with the public holding
12.5%. The workers opposed this step on the grounds that the company will lose a major business
advantage of being subsidised by the Government and that the workers are better protected under
the Govt control.

2011-2012 - labour unrest started in the Manesar Plant with Sonu Gujjar, a local labour leader
demanding right to establish an alternative labour union due to non alignment of a large section
of workers with the existing union.

2012 - Labour Union demands high wages, housing, Gifts and holidays etc. but when this
demands was not met the protests became violent and it was one of the most heinous of
industrial crime in the history of India.

Business

Culture: Indian and Japanese are far different there discipline, punctuality, employee connect are very
different. They are some major points that are cant make connect with Indians.They need to understand the
culture of every place. They also cannot force certain things, which are unlawful. They need to maintain the
balance between the employee satisfaction and their profit.

Globalisation: Suzuki Motor Corps entire global operations spread across Hungary, Indonesia, Spain,
Pakistan, Thailand, Malaysia, China and the Philippines.

Organisations structure: senior most positions and now with absolute power to hire and fire, the second
rung of senior decision makers have been gradually changed with a bias towards Japanese executives. It is a
known tactic in the corporate corridors to apparently retain the job titles and offices undisturbed but remove
the responsibilities one by one and vest it with another position. This has been done both overtly and covertly
over the last twelve years. Several senior executives have bid farewell to Maruti Udyog due to this reason.

Competition: The management did not pay heed to the union demands because of increased competition in
the automotive sector and lower profit margins.

Communication Problem: There was no proper communication channel between Managers and workers.
The management was clue less about the extent to which a section of workers were enraged. That means,
there was no information of such a degree of discontent with the management.

Transparency: The problem in 2011 was solved in a sneaky way by the management by sending off Sonu
Gujjar and twelve others with a Golden Handshake scheme which lacked transparency.
 Regular Monitoring & Feedback: Though the management was aware of ring leaders and instigators, it
did not have any concrete and actionable information about the intentions of the striking workers to kill and
burn. It is evident that the action of breaking an executives limbs and leaving him to burn to death was a
murder and it certainly was not an accident. Normally, such crimes are planned and within the group of
several workers with criminal intentions, such plans are discussed. The management did not have any
mechanism to collect informal information through its network of informants.

Social
Internal environment: It was evident from the beginning that the core reason for labour unrest at Maruti is
the difference in pay, allowances and assets among the workers. On the one hand, a permanent worker draws
over three times the salary of a contract worker and also enjoys several facilities like medical, insurance and
retirement benefits. On the other hand, the future of a contract worker always hangs in balance because of
the impending day on which he will be confirmed as a permanent employee or thrown out of work for
whatever reason. Workers, both permanent and contracted feel that they are not being given their due share
of the huge profits Maruti Udyog is making with the highest market share in the car industry. Though the
automobile industry in India is said to be in a temporary recession, the car industry is seeing an
unprecedented growth in the last few years and for over 28 years, Maruti has been the market leader. The
profits and balance sheets are in public domain. An educated and aware worker is also aware that his salary
and allowances have not risen in proportion to the rise in profits of the company. They have been expressing
this feeling for several years and there have been salary rises but never in the kind of scale and proportion
which the workers were demanding. On the day of starting the strike, average Maruti Udyog, Manesar
worker was still one of the best paid automotive factory worker in India, but not paid in proportion to what
the management was earning through them.

External Environment: In Haryana, young blue-collar workers have been dramatic change around them.
Now Gurgaon has become a commercial hub. Overnight people have become rich and their lives have
transformed simply because they made a killing selling their land. They are less tolerant and fairly aggressive
in their expectations and how they want to achieve it. The region boasts of at least one male member from a
family in the Armed Forces and these soldiers who retire are normally not docile, they fight for their rights
and do so by involving themselves with local politicians.

Legal
Labour laws are biased towards workers: Labour unions in the manufacturing sector have always
been politically oriented and wherever the political orientation is absent, the political leaders and parties
fight with each other to gain dominance or create a strong hold. Since it is not against the law for workers
to affiliate themselves to political parties, creation of multiple unions, resulting clashes and internecine
rivalry become the norm.

Labour Laws are not properly implemented: India has strict labour laws, but their application is
routinely avoided by hiring low-wage contract workers.

Archaic laws not match with industries requirement: Investor in labour intensive sectors will demand a
protective and clear policy environment from the Indian government before entering into India. As in
today's world companies need workers in contract basis to reduce cost and increase efficiency, there must
be proper rules and regulation for employing contractual workers.